updated 11:25 pm EST, Wed December 9, 2009
Titles held back four months past print shipments
Several major publishers have begun delaying e-book releases to combat the competitive price slashing of best sellers, according to The Wall Street Journal. Simon & Schuster is putting a four month hold on 35 titles scheduled for release next year, while Lagerdere SCA's Hachette Book Group is planning to take similar actions.
The surge in digital publishing has been aided by devices such as Amazon's Kindle and Barnes & Noble's Nook. A variety of other devices are already on the market, with additional alternatives scheduled for release during the holiday season or early next year.
E-books have even established a strong presence on smaller devices such as the iPhone. While games had dominated the new App Store submissions for most of 2008 and 2009, e-books took the lead beginning in September.
"The right place for the e-book is after the hardcover but before the paperback," said Simon & Schuster CEO Carolyn Reidy. "We believe some people will be disappointed. But with new readers coming and sales booming, we need to do this now, before the installed base of e-book reading devices gets to a size where doing it would be impossible."
While traditional book publishers are attempting to transform their business model to maximize profits in the age of e-books, magazine and newspaper publishers have been preparing to reinvigorate their segment by optimizing media for the latest mobile devices. Condé Nast, Hearst, Meredith, News Corp and Time recently announced a joint venture aimed at distributing their respective content through a common portal and optimizing publications for computers, smartphones and tablets.
Hachette will follow the same route as Simon & Schuster, maintaining a delay of three to four months before releasing digital versions of potential best-sellers. We're doing this to preserve our industry," said Hachette's CEO David Young. "I can't sit back and watch years of building authors sold off at bargain-basement prices. It's about the future of the business."
"Authors get the most publicity at launch and need to strike while the iron is hot," argued an Amazon spokesperson. "If readers can't get their preferred format at that moment, they may buy a different book or just not buy a book at all."
The pricing conflicts are not limited to current e-book offerings, as many best-sellers are now sold for $10 even as a hard-cover edition. The American Booksellers Association, a group representing many independent bookstores, recently accused several retailers of predatory pricing. The organization suggests outlets such as Amazon, Walmart and Target have been selling the hardcovers at a loss.
A book that retails for $35 typically carries a wholesale price of around $17.50. The ABA claims the retailers have not received special pricing, but are nonetheless selling each title at a significant loss in a pricing war designed to lure customers. The group is asking the Department of Justice to investigate the practices, including the pricing of print books and digital editions.
"What's been demonstrated is that next quarter results are better if you cling to the existing core business, that it's better to sell physical media than digital media," BigChampagne's Mr. Garland to WSJ. "But for how many quarters can you employ those tactics before they become an obvious strategic disadvantage? The digital marketplace today is devastating the traditional music business, regardless of piracy issues."